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Seeking a clear differentiation between economic activities and social activities while imposing Covid-related curbs in Karnataka, the Mangaluru-based Kanara Industries Association (KIA) has asked the government to remove all curbs on economic activities.
In a letter to the Karnataka Chief Minister, Basavaraja Bommai, the KIA president, Isaac Vas, said night curfew is still applicable to economic activities during the third wave of Covid. This is affecting the demand for the products from MSME (micro, small and medium enterprise) sector. Reduced demand, in turn, affects production, he said.
“Moreover, the curbs on economic activities are adding to the sense of insecurity. It is an accepted fact that no economic activity will rise in an insecure atmosphere. Lack of demand has hampered the production status of MSMEs,” Vas said.
Hike in power tariff
On the proposal by the Escoms (electricity supply companies) in Karnataka to increase the power tariff by ₹2 a unit, he said this is like sounding a death knell not only to MSMEs but also to the common consumers of power in these challenging times.
Escoms should reduce their distribution losses and overheads instead of putting additional burden on the consumers. Increasing efficiency that can add to the profit is the only way forward, instead of year-on-year increase of tariff, he said.
Stating that energy purchase by MSMEs has been coming down since the last five years, he said the average energy purchase in of industries in LT-5 category has come down from 136.78 million units in 2016-17 to 123.75 million units in 2020-21.
It is clear that the falling consumption is an indication of decline in economic activities and stress of MSMEs. He said primarily MSMEs use power in LT-5 category. It also clarifies the fact that as the cost of power increases the demand comes down, he said.
Impact on MSMEs
MSME sector will completely collapse if the power tariff is increased and Covid-related curbs on economic activities are not removed. The impact of any hike in power tariff will be particularly disastrous for MSMEs as they struggle to revive operations from the Covid pandemic and severe slowdown in the economy, he said.
Urging the government to instruct the Escoms to give up the proposal of increase in power tariff, he said it should also immediately instruct the officials to apply curbs only on social activities and remove all curbs on economic activities. There should be a clear differentiation between economic activities and social activities, he said.
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